The California Fair Political Practices Commission is investigating Orange County State Sen. Mimi Walters for potential conflict-of-interest violations after it was revealed that her office had inquired about a financial claim filed by one of her husband's companies.

As first reported by the Los Angeles Times, Walters' staff called prison officials late last year and early this year to inquire about the status of a claim filed by Drug Consultants, Inc., which is co-owned by the senator's husband, David. The company, which provides pharmacists to California prisons, filed a claim with the California Victim Compensation and Government Claims Board last year, contending that the state had underpaid for its services. The commission approved a $74,400 payout to Drug Consultants in February.

Emails unearthed by a records request filed by the Times revealed that a staffer in Walters' office contacted multiple prison officials about the claim. One email said that the senator's office was calling "almost every day" for updates. This prompted prison officials to notify the Senate Rules Committee in May about the senator's inquiries. That committee has since dismissed any concerns regarding the inquiries, but then the Fair Political Practices Commission got involved.

This month, Gary Winuk, chief of enforcement for the Fair Political Practices Commission, notified Walters' attorney that the commission "will be pursuing an investigation regarding whether or not Senator Walters violated the Political Reform Act's conflict of interest prohibitions." Walters denies any wrongdoing.

"My staff did for them (Drug Consultants) what they do for any other small business struggling with the state bureaucracy," said Walters, R-Laguna Niguel. "No more or no less."

"The staff was completely unaware," Kincaid said. "They thought the senator's office was calling about a constituent."

Prison officials have said they did not give Drug Consultants any special treatment. Walters' attorney, Charles H. Bell, Jr. said the senator and her staff did not use their positions to influence the outcome in any way. Rather, he said, the phone calls focused first on the status of the claim and then, when that was ascertained, how the company could navigate a confusing bureaucratic process involving four government agencies.

Bell said Drug Consultants filed its claim with the state in October 2011. In that initial filing, the company sought more than $100,000. By December, when it still had received no word about what was happening, a representative from the company called the senator and asked for help. The senator assigned one of her aides, D. Everett Rice, to look into the matter.

Bell said it's possible that Rice knew that Walters' husband had ownership in the company, but Bell said he didn't know for sure. But even if he did know, Bell said, all Rice did was try to help the company find out what was going on. Rice eventually learned that the company's claim had been stalled because it needed to submit a $25 fee.

Once that was addressed, Bell said the staffer started asking questions about where the claim would go next and what more needed to happen. Bell said the process was confusing, largely because it required interacting with multiple agencies.

Greg Schmidt, Senate Secretary, sounded a similar note when he was asked about the case.

"There was no allegation that threats were made, or undue influence was applied to achieve a certain outcome, only that calls were made to ascertain the progress of the claim and questions were asked as to what might be done to move things along," Schmidt said in an email. "That is within the norm of constituent service — and being a spouse or relative does not preclude one from constituent service."

There are those in the Capitol community, however, who believe that officials should distance themselves from any matters that affect their personal finances, even if the inquiry is harmless. Bell acknowledged "the optics" on this case might look bad to some, but the bottom line, he said, is that nothing improper occurred. We'll have to wait to see what the Fair Political Practices Commission says.

User Agreement

Keep it civil and stay on topic. No profanity, vulgarity, racial
slurs or personal attacks. People who harass others or joke about
tragedies will be blocked. By posting your comment, you agree to
allow Orange County Register Communications, Inc. the right to
republish your name and comment in additional Register publications
without any notification or payment.